ProPhase plans intensive marketing campaign for next cough-cold season

By Michael Johnsen

DOYLESTOWN, Pa. — The lackluster cough-cold season will necessitate a greater need for marketing and promotion next season, ProPhase Labs chairman and CEO Ted Karkus said on Thursday in announcing first-quarter results for the period ended March 31.

ProPhase Labs reported higher net sales of 87.5% to $6 million for the period though the company incurred a net loss of $688,000, or ($0.05) per share. That sharp increase in net sales were "attributable to the success of our marketing efforts in late fiscal 2011," Karkus noted. "Our marketing strategies led to increased consumer purchases in late fiscal 2011, as a consequence of which, our retailers placed larger stock replenishment orders in the first quarter of 2012 to maintain their inventory levels," he said.

However, the second half of the cough-cold season never materialized, which means there is still plenty of inventory in the supply chain. To help move more of that inventory out of the stores and into consumer medicine cabinets for the next season, ProPhase will need to increase its marketing presence.

"In order to continue to grow revenues from year to year, we plan to continue to invest strategically in a fully integrated marketing campaign in conjunction with in-store promotional support [for the 2012-2013 season]," Karkus said. "These increased expenses in building our brand impact our short term profitability … We believe that our current capital reserves are sufficient to fund an effective marketing campaign for the 2012-2013 cold season in order to continually increase the value of the Cold-Eeze brand."